Icelandair kills off premium economy offering

Icelandair will no longer offer Economy Comfort, its premium economy class of service, effective next month. In a message to travel agents the airline outlined the change, citing competitive reasons for the move.

In order to remain innovative and competitive, Icelandair is excited to announce changes to our Booking Class Structure, effective 07APR18.

We will be discontinuing our Economy Comfort product in order to offer our customers more fare options for a travel experience that best suits their needs.

The Economy Comfort product offered a number of advantages for passengers but came up short in one key premium economy category: Seat width. With the bulk of its fleet flying in a 3-3 seating layout Icelandair offered a blocked middle seat for its Economy Comfort passengers but not the true extra width often associated with premium economy service. Even the extra legroom offered was skimpy at only an extra inch or so compared to the regular economy cabin.

The tickets did include business class check-in and lounge access complimentary meals and a universal power outlet, among other benefits.

Removing premium economy seems to fly in the face of general industry trends. Most legacy long-haul carriers either offer a premium economy product or are working on rolling one out. The shift to remove it – and citing competitive market reasons – highlights two significant challenges Icelandair faces. First, its routes are generally not as long as some other network carriers. With the 767 fleet it is extending its reach but most flights remain under eight hours, limiting the value proposition of the premium product.

Icelandair also faces massive LCC pressure, both from WOW airlines with which it shares a Reykjavik hub and other carriers such as Norwegian’s long haul fleet. The recent push towards basic economy product offerings across the Atlantic further highlights that challenge. With a product that didn’t really stand out as differentiated it was hard for Icelandair to drive the sales it needed to maintain Economy Comfort as a separate cabin.

This move should not be taken as a harbinger of other premium economy products disappearing. Those products are expected to continue to proliferate. But not on single-aisle aircraft. The space constraints make for tough economics with that offering.

For those already booked in Economy Comfort prior to this announcement the news is spectacularly good. Those travelers will see their bookings upgraded to Saga (business) Class at no additional charge.

About Seth Miller

Seth Miller has over a decade of experience covering the airline industry. With a strong focus on passenger experience, Seth also has deep knowledge of inflight connectivity and loyalty programs. He is widely respected as an unbiased commentator on the aviation industry.

He is frequently consulted on innovations in passenger experience by airlines and technology providers.